Dec 2009 Session 2

[Asif]

1) Define, explore and compare the roles of the Chief Executive Officer and Company Chairman
2) Explain and assess the importance, roles and accountabilities of board committees in corporate governence

[Suze]

The Chairman

According to the UK Higgs report the role of a chairman is "pivotal in creating the conditions for overall board and individual director effectiveness, both inside and outside the boardroom"

The chairman runs the board and sets its agenda.

He does this by tyring to ensure that the board focuses on strategic matters. He should also ensure that the contributions made by the other board members are co-ordinated and that a good realationship between the members are maintained.

The chairman should also ensure that information received is accurate and timely.

Communication with shareholders are effective.

when there are controversial issues that sufficient time is allowed for discussions

He must take the lead in developing the board




The CEO

The role of the CEO is to run the organization's business and to propose and develop the company's policy. The CEO is responsible for implementing the decisions made by the board and to develop the main policy statements and review the organisation's structure and operational performance.

The CEO is responsible for:

Risk Management

manages the risk profile in line with the risk appetite accepted by hte board and that appropriate internal controls are in place.

board committees

he will make recommendations to board committees on remuneration policy and terms of employment.

Investing and Financing

he will examine major investments and identify new intiatives.

The CEO will ensure that the organisation achieves its objectives by oprimising the use of resources.

The role of the Chairman is more a strategic one while the CEO is more the tatical one when comparing the roles of each one.

[Asif]

Chairman -
1) Ensure the board develop and implement the company's strategy
2) Represent the company to stakeholders, explaining mission and vision. Chair the AGM, acting as a voice of the company.
3) Play a major role in determining the board structure
- balance of NEDs/EDs
- board composition/rumenaration
4) Discuss company's strategy with major shareholders like institutional shareholders and ensure each other views are communicated.

CEO-
1) Implement and develop company's strategies agreed in the board meeting.
2) Act as representative to important stakeholders
3) Evaluate NED and ED
4) Evaluate and manage company financial and physical resources
5) Develop and Manage a good human resource.
6) Ensure sound inter ctrl system regarding financial , operation risk.
7) Monitor company performance with budget and plan. Ensure plan is being implemented.
8)

[Asif]

2) Explain and assess the importance, roles and accountabilities of board committees in corporate governence

Board Committes usually consists members from the Board of Director. And theyreport to the board of director or Chairman

1) Board comite can share the work of the board; reducing the work.
2) It enable the board to concentrate on other issues
3) Board committee consist experts which is relevent for decision making
4) It could be argued they are indepedent such as audit committees
5) Shows concern to shareholder and communicate with important stakeholders
6) Committee recocommends/advises action to the board
7) It is a requirement of the Code to have committees